Across these cities, including Mumbai, Delhi-NCR, Bengaluru and Pune, ready commercial space eligible for REIT investments amounts to 277 million sq. ft, accounting for less than half (44 per cent) of total office stock in India, showed a Cushman & Wakefield-Global Real Estate Institute report.

In addition to completed stock, around 68 million sq. ft of additional REIT-eligible stock is expected to be completed by 2020 across these seven cities.

The commercial office stock, which accounts for the majority at around 70 per cent of the total value of REIT-eligible stock, is estimated to have a total value of $44 billion to $53 billion.

In retail assets, the estimated value of REIT-eligible stock (completed and under-construction malls) is $20 billion to $24 billion, with 52 million sq. ft malls eligible for REITs. About 78 per cent (41 msf) of these malls are completed and operational, while the remaining 11 million sq. ft are under construction and scheduled to be completed by 2018.

"The commercial office market is likely to be on an upward trajectory steered by an improving economic outlook, as well as strong demand from certain sectors such as IT-BPM, BFSI, FMCG and pharmaceutical sectors going ahead. In such a buoyant environment, the Indian market is well-placed to witness the listing of REITs, led by the government's steps to ease policies for the investment vehicle," said Anshul Jain, MD, Cushman & Wakefield India. "Over the last year, the government has not only streamlined the taxation policy of REITs, but also eased regulations that have warmed up investors to REITs in India," he added.

He highlighted the recent modifications to measures, including increasing the number of sponsors to five from three allowed earlier, easing the investment cap in under-construction assets allowing up to 20 per cent of the investment fund in such assets, from 10 per cent earlier and removal of dividend distribution taxes.

In commercial stock, the highest value of REIT-eligible stock, including under-construction, is seen in Bengaluru at $12.3 billion to $15 billion. Besides steady supply, the city is likely to witness continued momentum in demand from IT-BPM companies. Bengaluru is distantly followed by Mumbai $8.9 billion to $10.9 billion and Delhi-NCR with $8.7 billion to $10.6 billion in terms of value of REIT-eligible stock.

"In conjunction with the imminent introduction of REITs, investors have already started increasing their exposure to commercial office assets. With a few large deals for office portfolios in the closure stages in the fourth quarter, the year 2016 is expected to record the highest annual investments of $3.6 billion made in this asset class since 2008. REITs have a huge opportunity for developers and investors in India, given the potential in the Indian real estate market," said Diwakar Rana, Managing Director, Capital Markets, India Cushman & Wakefield.

Pune has the highest under-construction REIT-eligible stock of 19 million sq. ft by 2020; hence, the city's projects would hold weight amongst investors in the near future. Moreover, Pune is likely to emerge as a strong market led by IT-business process management (BPM) companies and entities conducting offshore activities in sectors such as BFSI. These companies prefer Pune due to its competitive rentals, availability of local talent and close proximity to Mumbai.

Hyderabad too is a prominent market that would be on investors' radar, with the city expected to account for roughly 11 per cent of the total under-construction REIT-eligible projects over the next four years. The city's commercial market has been on a path of revival since 2014 after the bifurcation of the state, bringing political stability to Hyderabad.

While in completed projects as of 2016, Delhi-NCR has the second-highest value of REIT-eligible stock, the city currently has the low under-construction stock that could curtail future investment opportunities for investors.

In total retail stock, the highest value of REIT-eligible stock is estimated in Mumbai, with value of $6.1 billion to $7.5 billion. Mumbai is followed by Delhi-NCR, with REIT-eligible malls valued at $4.7 to $5.7 billion, followed by Bengaluru with REIT-eligible malls valued at $2.8 to $3.4 billion.

The year to date private equity investments in retail assets during 2016 increased threefold to $569 million, from $156 million a year ago. Around 65 per cent of retail asset investments made during 2016 are concentrated in Mumbai, followed by Delhi-NCR at a distant second with 24 per cent share.